Critical Illness Cover With Term Insurance Plan

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Term insurance plans are becoming increasingly popular among young salaried Indians and many are realizing the premium benefits of having a life cover & buying a term plan online. That’s why term plans have been evolving constantly and the best term plans available today offer much more than the basic life cover for an individual – they also offer a Critical Illness Cover which includes a specified number of illnesses. This critical illness rider acts as an income replacement without the premium getting affected, offering double tax benefits, and providing a large cover that can take care of one’s medical & day-to-day expenses.

Thus, new age term plans provide protection for both you and your family. Here are 5 big reasons why you should go for a term insurance with a critical illness cover (irrespective of whether you have a mediclaim or not):

1. Premiums are cheap & stay the same for a longer policy term
When you opt for a critical illness along with a term insurance, the premium stays the same for the entire policy term. This is very unlike critical illness & mediclaim plans taken from health insurance companies where the premium changes every 1-2 years. Also, the premium is very low – a cover of Rs 15 lakh critical illness can be availed at less than Rs. 300 p.m. when taken with a term insurance plan.

2. Immediate payouts on detection of a critical illness
Worthy life insurance policies have no condition of survival period if detected with a critical illness i.e. the claim will be paid out to the policyholder immediately on detection of a covered critical illness. The policyholder can use this amount however he/she chooses. Only a photocopy of the diagnosis report needs to be submitted to claim the proceeds.

3. Treatment in a hospital of your choice
Another great advantage of adding a critical illness rider to your term insurance is that the money is credited directly to the policy holder’s account and is not paid to the hospital directly, which requires you to choose a hospital of their choice. And so, you can choose where you want to get treated and pay the bills yourself. Pre and post hospitalization formalities required by a third party administrator (TPA) in case of mediclaim also do not apply here. This eliminates the need of checking network hospitals listed with your insurer. You can get treated in a hospital close to your home or where a doctor you are comfortable with operates from.

4. Acts as Income replacement
Even if your medical treatment is covered by employer’s insurance, or an existing mediclaim plan, a critical illness plan is still important because it acts as an income replacement. On the diagnosis of a critical illness, it is certain that you will be on an extended leave for a long time (up to 1 year in case of Cancer) and may be on a loss of pay. In this case, a critical illness plan which pays out money for diagnosis acts as an income replacement. You can use the money from the critical illness cover to then cover the costs of medicines, doctor visits, traveling to and fro hospitals, day-to-day expenditures, school fee or any other expenditure your family incurs.

5. Double tax benefits
Lastly, while a term insurance offers tax benefits u/s 80C only, a term plan with critical illness cover provides tax benefits u/s 80C & 80D, thus helping you make the most of the premiums you pay by helping you save additional tax. This can be used to maximize tax savings u/s 80D since very few people fully use the maximum limit of Rs. 25,000 (mediclaim plans cost usually 10 -15 thousand) depending on the cover taken.

Now that you know all the benefits of a decent term plan with critical illness benefit, here’s how to choose one:
It should cover a number of critical illnesses like cancer, CABG, liver, brain and kidney diseases included. It should also pay out at the time of diagnosis without waiving the premium. Also pay attention that the plan should offer and immediate payout on diagnosis with no survival period. Lastly, the brand you’re buying the term insurance from should have a high claim settlement ratio so that there’s a guarantee that your family gets what was meant for you.. inputs from top professional site.